As expected, the Federal Reserve decided to keep interest rates on hold.
All eyes will now be on Federal Reserve Chairman Jerome Powell’s press conference scheduled for 9:30 pm (UTC+3, 2:30 pm ET).
The meeting came amid weak February employment data and sharp fluctuations in the oil market due to escalating tensions between the United States and Iran.
Market expectations were mainly focused on the Federal Reserve keeping interest rates unchanged. But more than the decision itself, the economic forecast and forward-looking guidance the Fed releases will be decisive for investors.
The Fed’s interest rate decisions have a wide range of effects over time, from mortgage rates and credit card borrowing costs to auto loans and savings returns. While the impact of a single interest rate decision may be limited, long cycles of rate cuts or increases can have a significant impact on both consumers and businesses. Higher interest rates can help curb inflation, but they can also cause companies to delay hiring or resort to layoffs.
Forecasts published in December predicted only one rate cut in 2026. Although these forecasts are not binding, they do provide important clues about the medium- to long-term outlook for the U.S. economy.
On the other hand, uncertainty surrounding U.S. economic policy continues. In February, the Supreme Court’s decision to cancel several tariffs imposed by former President Donald Trump raised questions among businesses and consumers about refund procedures. The Trump administration has since imposed a wide range of new tariffs.
Federal Reserve Chairman Jerome Powell has previously said that tariffs are already having an impact on the economy, and also suggested that a potential rise in inflation could be caused by a variety of factors. Inflation statistics have recently hovered just above the Fed’s 2% target.
*This is not investment advice.
